Monthly Summary for Cabinet June 2020

No. A-4501 I I 4 12020- Admn.III Government of India Ministry of Finance (Department of Economic Affairs) JJg frfurr,roro New Delhi, OFFICE MEMORANDUM The uldersigped is directed to circulate l-rerewitl-r the unclassified portion of Monthly Summary on important policy decisions in respect of Department of Economic Affairs for the Month of June, 2020. W (Surinder Pal Singh) Joint Secretary to the Government of lndia Tel No. 23092100 To L. All Mernbers of the Uriion Council of Ministers, Government of India, New Delhi. 2. Vice Chairman, Niti Aayog, Yojna Bhawan, New Delhi' 3. Cabinet Secretary, Cabinet Secretariat, Rashtrapati Bhavan, New Delhi. 4. Secretary to the President of India, Rashtrapati Bhavan, New Delhi. 5. Secretary to the Vice-President of India, 6, Maulana Azad Road, New Delhi. 6. Principat Secretary to the Prime Minister, PMo, South Block, New Delhi 7. chairrnan, Union Public Service commission, Dholpur House, New Delhi. 8. All Mernbers of Niti Aayog, Yojna Bhawan, New Delhi' 9. Secretaries to all the Ministries/Depaftmertts, Government of India, New Delhi. 10. PS to MOS (F), PPS to Finance Secretary, PPS to Secretary (EA), PPS to Secretary (RevenLre), PPS to Secretary (Expenditure), PPS to Secretary (DIPAM)' 11. Chief Economic Adviser, DEA. 12. Additiopal Secretary (Shri A. Giridhar) Cabinet Secretariat, Rashtrapati Bhavan, New Delhi' 13. Dr. C.S. Mohapatra, Additional Secretary (FS &CS), DEA 14. Shri K. Rajaraman, Adclitional Secretary (Admn. & Investment), DEA. 15. Sh.Sarneer Kumar Khare, Additional Secretary (FB&ADB), DEA 16. Ms.Meera Swarup, AS&FA(Finance). 17. Shri A.M. Bajaj, Additional Secretary (FM), DEA 18. Shri Sanjeev Sanyal, Principal Economic Adviser, DEA 19. All Heads of Divisions in Departmerrt of Econotnic Affairs' (IERy JS(BLrdget)/JS(BC&lER)/JS(lnv)/ JS(IPF)/Adviser(C&C/FSRL/FS&CS)/Adviser CAAA. 20. Shri Rajesh Malhotra, Addl.DG (M&C), M/o Finance, North Block, New Delhi' 21". GLrard File - 2020.No.A-450 1 1 I 412020' Admn.lll Government of India Ministry of Finance (Department of Economic Affairs) *** Subject: Monthly summary on important policy decisions pertaining to DEA for the month of June,2020. 1. Macro-economic Overview The details of imporlant information in tabular form is given at Annexure. 2. Other important DeveloPments 2.1(a) Amendments to the Indian Stamp Act, 1899: It has been decided that amendments in the Indian Stamp Act, lg99 would come into effect from l't July,2O2O and Rules made thereunder for Rationalized Collection Mechanism of Stamp Duty across India with respect to Securities Market Instruments. The Regulators-RBl & SEBI have been authorized by the Central Govt. to issue circulars/operational guidelines under Indian Stamp Act, 1899 so as to ensure smooth Implementation w.e.f. 1't Ju1y,2020. (b) Following important decisions were taken by SEBI during the month of June, 2020: h'o. :lmc of th*r Diltc mporta nt Polic.v- $eeision A i) EBI r6.5.20:0 NB has anlel'Icled the SnlB (lssire of capiral nti Discl0sure t.t rerne t.tts) Regulatirlns 20 1I to relar the require rne nt of nlln nl u 111 6 1110nrhs tirne belween trv0 c0nsecuttve l:) ISSTICS lii; IlBI 16.6.2A2{) SLrBI has tempr:rarill' reiaxed ccrtaiti provisions of the SEBI 'l' SLrbslautia i Aoql".lISI lt);1 oi' Shares anel akeoverS) I{t:gu aticin5. () i, li:r Iii SIil() thC cfeep ltg acq r.t I tr011 lirrr ol' 5% t0 0%. ect to cet1.i:.itt cottclilions. t.1 iii) DI]I 6.2424 lilf l t"rs relaxed thc {ianie*,orlt {br stressed ccltnpatries to raise ncls fronr the market, throirgfi preferential issue based on the last rvceks CE STI ect to cerlairt conditions. i rr) LiI]I 5.tt.2t)2t) SE13 Iloarcl has appnrvecl rtail1 arlendtneuts in the SEBI Sttbstantla cquISltr0n Shi.lres zirrd Takeovers) Regu atlous" I It)r c0lllllletiot1 0f' acqul tr(irr rhrough bulk ancl i)loclt dealS uril19 the (]pelr () I ILI period: dep0srllng ${J% i)tr' 0pen ol'ler Irl escrolv v) SlrLt I 6.2*20 UBI Iloar"d has approved soln artlcndments to the Settlernelt lation S" 2{) o lnC lldxtl() Prclrloters to be ltcluclerl a flont(, : rvith hc rl'lncipal Offlccr fbr thc purposc of ca.lcu atit'in o the trasc- I'ni)unt. i; rr rlhcr in older tr) silve Ilnle, l1stead ol' ISSUlil{I seftlerrent n01ice under R.egulation 18" a paragraph shall tre clgclefl in tlre slrorv causc notice, infbrriiing aboiit the option to 1e a set{.lenrettt licati<in2. 2.2 (a) MSME Emergency Response Development Policy Loan for USD 750 million was negotiated with the World Bank on June 12, 2020. (b) The first tranche of the multi-tranche financing facility for NCRTC's Delhi-Meerut negional Rapid Transit Corridor project for USD 500 million was negotiated with the ADB on June 23, 2020. (c) Signing of loan agreements between India and the World Bank is scheduled for June 29, ZO20 for:ill S)OO million for Tamil Nadu Housing Sector Strengthening Program; and (ii) $50 million for Tamil Nadu Housing and Habitat Development Project. 2.3(a) The Credit Facility AgreementlLoan Agreement for Euro 200 million for the project Accelerating India's COVID-19 Social Protection Response Program was signed between DEA and AFD on 18th June2020. (b) Loan Agreement for Euro 23 million and Grant Agreement for Euro 1 million for the prolect Tripura I Climate Resilience of Forest Ecosystems, Biodiversity & Adaptive Capacities of Forest Dependent Communities were signed between DEA and KFW on 19th June2020. (I) (c) Government to Government Financial Cooperation (FC) Agreement 2019 and Technical Cooperation (TC) Agreement 2019 were signed between DEA and the German Embassy on 21.0e.2020 to formalise the commitment of Euro 45.85 million for technical Cooperation and Euro 959.20 million for Financial Cooperation for funding various projects. 2.4 The current security features in the Indian Bank notes were last revised in the year2005. The Government has appioved the RBI's proposal of new security features in banknotes for implementation as p.. tlre section 25 of RBI act 1934 to RBI on16.06.2020.Issuance of Indian banknotes with new security featuresto the public are likely to commence from 3lstMarch 2022. 2.5 Financial Stability & Cyber Security Division (FS&CS) is taking all necessary action in consultation with DFS and RBI to ensure that the Special Liquidity Scheme for NBFCs/HFCs/MFIs, announced as a part of the Atma Nirbhar Bharat package, is implemented quickly. 2.6 Status of Approval of Cabinet Note for signing and rectification of agreement between Government of India and NDB for establishing Indian Regional Office of NDB: Final Cabinet Note was submitted to the Cabinet Secretariat on26.6.2020. 2.7 Secretarial assistance to the Empowered Group on Economic and Welfare Measures has been provided during the month..J ' 2.8 Following important meetings were held during the month of June, 20202 i. Secretary (EA) chaired the 6th meeting of Strategic Planning Group (SPG) held with RBI and other stakeholders on 8.6.2020. Important decisions in view of Corona-l9 pandemic situation were taken, in order to maintain business continuity of production units and uninterrupted supply of currency notes and coins to the public. ii. Secretary (EA) attended the 24th meeting of the Sub-Committee of Financial Stability and Development Council (FDSC-SC) chaired by Governor, RBI which was held on June 18,2020 through video conference. Secretary (EA) was joined by Chief Economic Adviser, Additional Secretaly (FS&CS) and Secretary (FSDC) on behalf of DEA. The meeting discussed issues inter alia, on assessment of the Economy and Financial Stability, Inter-Regulatory Coordination and Financial Sector Developments. iii. Secretary (EA) also participated in the 583'd meeting of Central Board of the Reserve Bank of India (RBI) held on 26.06.2020 under the Chairmanship of Shri Shaktikanta Das, Governor through video conference. Secretary, Depaftment of Financial Services also participated in this meeting among other Board Directors. There was discussion on overall macroeconomic conditions - both domestic and global; financial sector situation; and the impact of various monetary, regulatory and other measures taken by the RBI in the context of the COVID-19 pandemic; current economic situation and the evolving challenges posed by the pandemic. The Board also discussed the Reserve Bank's activities during the period (July 2019- June 2020), the budget for the next accounting year July 2020 to March 2021 (aligned with the Government's financial year), other policy and operational matters. lV. Secretary (EA) chaired the third IMSC meeting on Fintech which was held on 9th June, 2020 v. Dr. C.S. Mohapatra, Additional Secretary (FS&CS) attended a Webex call on 2nd June 2020 on behalf of Secretary (EA) for a virtual meeting of FSB's Standing Committee on Standards Implementation (SCSI). The draft proposal by the Implementation Monitoring Task Force (IMTF) on how implementation monitoring should be supported and organised going forward and the peer review report of Germany were the major issues discussed. vi. Dr. C.S. Mohapatra, Additional Secretary (FS&CS) parlicipated in the FSB Plenary Meeting chaired by Mr. Randal K. Quarles, Governor and Vice Chairman of the US Federal Reserve, held through teleconference on 26tt' Jtne,202O.The meeting, inter-alia discussed latest financial stability developments relating to COVID-19, financial authorities' policy responses, and areas for cross-border and cross-sectoral coordination. vii. Tripartite Portfolio Meetings (through video conference) to review the on-going and pipeline projects assisted by ADB and World Bank, and co-chaired by Sh. Sameer Khare, Additional Secretary (FB and ADB) with the respective Country Director, were held...4.. [June 10: WB pipeline; June 16-17: WB on-going; June 18-19: ADB on-going; andJune24: ADB pipelinel. viii. Sh.Sameer Khare, Additional Secretary (FB and ADB) chaired the 107th meeting of the DEA Screening Committee for externally aided projects, on June 11,2020. ix" Sh.Sameer Khare, Additional Secretary (FB and ADB) also chaired a meeting through video-conference on June 22, 2O2O under the with MoHFW, joined by the multilateral and bilateral agencies, to discuss the requirements of external assistance for the PM-ASBY project. x. DEA participated in VC relating to exchange of lists under ongoing India Korea CEPA upgradation nlgotiaiions was held with kor.u undeithe aegis of DoC on 12tr' June,2020. xi. Second round BIT negotiations between India and Uzbekistan to discuss on Bilateral Investment Treaty (BIT) was held on 10-11 June, 2020. xii. Remote tDA Meeting was held on June 24,2020 which was attended by Director (WB) and 4th Steering Committee meeting of IMF-SARTTAC held on June 3, 2020 vthich was attended by Director (IMF). xiii. Board Meeting of National Investment and Infrastructure Fund Limited Q'{IIFTL) was held on 22.6.2020 xlv Board Meeting of NIIFTL was held on 18.6.2020. 3. Minimum Government, Maximum Governance In particular, use of ICT in submission of Information is being encouraged. 4. Non-Compliance of ACC directions/orders Nil I 5. FDI proposals clearecl during the month and status of FDI proposals awaiting approval in the Department Awaiting Approval in the Department 07 *****I A Important Economic Develonment (In Tabular Form) Table 1: Growth of GDP (Percent) Real 7.0 6.1 4.2 Nominal 11.1 11.0 7.2 Table 2: Growth of GVA at constant Prices r cen . 2017-18 201 a 2019-20 a . . 2'd RE 3'd RE a PE Agriculture & Allied Sectors a 5.9 a 2.4 a 4.0 a Industry a a a Mining & quarrying a 4.9 a -5.8 a 3.1 a Manufacturing a 6.6 5.7 a 0.03 4.t a Electricity, gas, water suPPlY & a 11,.2 a 8.2 a other utility services a Construction a 5.0 6.t a 1.3 a Services a a a Trade, hotel, transPort, a 1.6 a 7.1 3.6 communication and services related to broadcasting Financial, real estate & a 4.7 a 6.8 a 4.6 professional services a Public administration, defence a 9.9 a 9.4 a 10.0 and other services a GVA at basic Price a 6.6 a 6.0 a 3.9 RE, - Revised EstirnateTable 3: Quarter wise real growth rates of GDP and GVA Ql Q3 Gross Domestic Product 5.2 4.4 4.1 3.1 Gross Value Added 4.8 4.3 3.5 3.0 'able 4: INFLATION- CPI-C, WPI (in Percent) May-2019 March-2020 Apr-2020 NI.ay-2020 CPI.C 3.05 5.84 2.19 0.42 -3.21 Note: CPI-C figr-rres for the month of April &.May,2020and WPI figure for April 2020 are nat available owing to the disruptions in data collection caused by Covid-19 pandemic and consequent lock-down. MONETARY DEVELOPMENT Item 1 June 2020 Repo Rate 4.00 10-!'ear tl-Sec l'}ar Yieltl -5.86 nk Credit l'ear-on-Year grorvth # 6.2 Note: # as on 5 June 2020 able 6: Merchandise Trade Performance (Customs Basis) (in US$ billion) Exports Imports Trade Balance ,2019 30.0 45.4 -15.4 N[.ay,2020 19.1 22.2 -3.1 ble 7: Services Trade Performance (in US$ billion) 2020 r 6.5 9.3 7.2 urce: Provisional data as per the Press Release dated r s.06.2020 of the Department of Commerce, Ministry of ommerce and Industryable 8: Balance of Items 2018-r9 Q3 20te-20 (P) Q3 Current Account Balance -17.8 -1.4 US$ billion Current Account Balance / GDP @er cent) -2.7 -0.2 Source: Reserve Bank of able 9: Fo Reserves (in US$ billion) March,2020 477.8 l2th Ju 2020 507.6 Reserve Bank of India able 10: Exchange Rate of the Indian Rupee (Rupee per unit of foreign currency) US Dollar Pound Euro yen 22"d June2020 76.0620 94.20'74 85.1 935 7 1.1 300 Source: Reserve Bank of able l1: External Debt (US$ Billion Dea cs e a mt be en rd 2 o 0f 18 as at end of Percentage variation r 2019 PR [(2/1)-U*100 (2) Total External debt outstanding 521.2 563.9 8.2 Quarterly Report on External Debt as at end-Decemb er, 20 19, DePartment of Economic Affairs, of Finance ble 12: Industrial Production Monthly Growth March-2019 March-2020 Industrial Productiotr GroMh Rate (llP) 2.'7 -18.3 Cumulative Growth 2018-19 2019-20 April-March 3.8 -0.8 Source: Estimates released the NSO on new series of20l l-12 ble 13: Core Industries Monthly Growth April-2019 Arrril-2020 Growth of Eight Core Industries. 5.2 -38.r Cumulative Growth 2018-19 20t9-20 April-March 4.4 0.4 Source: DPIIT, of Commerce & I ***r<rrrtr<*>k***